Financial
Accounts Receivable Factoring Agreement
Comprehensive factoring contract allowing businesses to sell outstanding invoices to third-party factors for immediate cash flow. Covers advance rates, fees, recourse terms, and collection procedures for effective receivables management.
Key Clauses
1
Purchase of Receivables
Defines which accounts receivable are eligible for factoring and the purchase process.
2
Advance Rate and Reserve
Specifies the percentage advanced upon purchase and reserve holdback amounts.
3
Factoring Fees
Details discount rates, service fees, and how charges are calculated.
4
Recourse Provisions
Establishes whether the seller bears risk if debtors fail to pay.
5
Collection Rights
Grants the factor authority to collect payments directly from account debtors.
Use This Template
When You Need This
- Improving cash flow by converting outstanding invoices to immediate funds
- A business needs working capital without taking on traditional debt
- Managing seasonal revenue fluctuations through invoice financing
- Outsourcing accounts receivable collection to a factoring company